Legalize / United Kingdom / Public General Act

Finance (No. 2) Act 2017

Type Public General Act

Publication 2017-11-16

State In force

Department Statute Law Database

Source legislation.gov.uk

Reform history JSON API

PART 1 — Direct taxes

Income tax: employment and pensions

Taxable benefits: time limit for making good

1

(1) Part 3 of ITEPA 2003 (employment income: earnings and benefits etc treated as earnings) is amended as follows.

(2) In section 87 (cash equivalent of benefit of non-cash voucher)—

(a) in subsection (2)(b), for “to the person incurring it” substitute “ , to the person incurring it, on or before 6 July following the relevant tax year ”, and

(b) after subsection (2) insert—

(2A) If the voucher is a non-cash voucher other than a cheque voucher, the relevant tax year is— (a) the tax year in which the cost of provision is incurred, or (b) if later, the tax year in which the employee receives the voucher. (2B) If the voucher is a cheque voucher, the relevant tax year is the tax year in which the voucher is handed over in exchange for money, goods or services.

(3) In section 88(3) (time at which cheque voucher treated as handed over), at the beginning insert “ For the purposes of subsection (2) and sections 87(2B) and 87A(6), ”.

(4) In section 94(2) (cash equivalent of benefit of credit-token), in paragraph (b), for the words from “employee” to the end substitute

employee— (i) to the person incurring it, and (ii) on or before 6 July following the tax year which contains the occasion in question.

(5) In section 105(2) (cash equivalent of benefit of living accommodation costing £75,000 or less), in paragraph (b), after “made good” insert “ , on or before 6 July following the tax year which contains the taxable period, ”.

(6) In section 106(3) (cash equivalent of benefit of living accommodation costing over £75,000), in paragraph (a), for the words from “paid” to “exceeds” substitute

paid— (i) by the employee, (ii) in respect of the accommodation, (iii) to the person providing it, and (iv) on or before 6 July following the tax year which contains the taxable period, exceeds

(7) In section 144 (deduction for payments for private use of car)—

(a) in subsection (1)(b), for “in” substitute “ on or before 6 July following ”,

(b) in subsection (2), after “paid” insert “ as mentioned in subsection (1)(b) ”, and

(8) In section 151(2) (when cash equivalent of benefit of car fuel is nil)—

(a) in the words before paragraph (a) omit “in the tax year in question”,

(b) in paragraph (a), at the beginning insert “ in the tax year in question, ”, and

(9) In section 152(2) (car fuel: proportionate reduction of cash equivalent)—

(a) in the words before paragraph (a) omit “for any part of the tax year in question”,

(b) in paragraph (a), at the beginning insert “ for any part of the tax year in question, ”,

(d) in paragraph (c)—

(i) after “employee”, in the first place it occurs, insert

— (i) for any part of the tax year in question,

, and

(ii) for “and the employee does make good that expense” substitute

, and (ii) the employee does make good that expense on or before 6 July following that tax year

(10) In section 158 (reduction for payments for private use of van)—

(a) in subsection (1)(b), for “in” substitute “ on or before 6 July following ”,

(b) in subsection (2), after “paid” insert “ as mentioned in subsection (1)(b) ”, and

(11) In section 162(2) (when cash equivalent of benefit of van fuel is nil)—

(a) in the words before paragraph (a) omit “in the tax year in question”,

(b) in paragraph (a), at the beginning insert “ in the tax year in question, ”, and

(12) In section 163(3) (van fuel: proportionate reduction of cash equivalent)—

(a) in the words before paragraph (a) omit “for any part of the tax year in question”,

(b) in paragraph (a), at the beginning insert “ for any part of the tax year in question, ”,

(d) in paragraph (c)—

(i) after “employee”, in the first place it occurs, insert

— (i) for any part of the tax year in question,

, and

(ii) for “and the employee does make good that expense” substitute

, and (ii) the employee does make good that expense on or before 6 July following that tax year

(13) In section 203(2) (cash equivalent of benefit treated as earnings), for “to the persons providing the benefit” substitute “ , to the persons providing the benefit, on or before 6 July following the tax year in which it is provided ”.

(14) The amendments made by this section have effect for the purpose of calculating income tax charged for the tax year 2017-18 or any subsequent tax year.

Taxable benefits: ultra-low emission vehicles

2

(1) ITEPA 2003 is amended as follows.

(2) In section 139 (car with a CO₂ emissions figure: the appropriate percentage), for subsections (1) to (6) substitute—

(1) The appropriate percentage for a year for a car with a CO₂ emissions figure of less than 75 is determined in accordance with the following table.

Car	Appropriate percentage
Car with CO₂ emissions figure of 0	2%
Car with CO₂ emissions figure of 1 - 50
Car with electric range figure of 130 or more	2%
Car with electric range figure of 70 - 129	5%
Car with electric range figure of 40 - 69	8%
Car with electric range figure of 30 - 39	12%
Car with electric range figure of less than 30	14%
Car with CO₂ emissions figure of 51 - 54	15%
Car with CO₂ emissions figure of 55 - 59	16%
Car with CO₂ emissions figure of 60 - 64	17%
Car with CO₂ emissions figure of 65 - 69	18%
Car with CO₂ emissions figure of 70 - 74	19%

(2) For the purposes of subsection (1) and the table, if a CO₂ emissions figure or an electric range figure is not a whole number, round it down to the nearest whole number. (3) The appropriate percentage for a year for a car with a CO₂ emissions figure of 75 or more is whichever is the lesser of— (a) 20% plus one percentage point for each 5 grams per kilometre driven by which the CO₂ emissions figure exceeds 75, and (b) 37%. (4) For the purposes of subsection (3), if a CO₂ emissions figure is not a multiple of 5, round it down to the nearest multiple of 5. (5) In this section, an “electric range figure” is the number of miles which is the equivalent of the number of kilometres specified in an EC certificate of conformity, an EC type-approval certificate or a UK approval certificate on the basis of which a car is registered, as being the maximum distance for which the car can be driven in electric mode without recharging the battery.

(3) In section 140 (car without a CO₂ emissions figure: the appropriate percentage)—

(a) in subsection (2), in the table —

(i) for “23%” substitute “ 24% ”, and

(ii) for “34%” substitute “ 35% ”;

(b) in subsection (3)(a), for “16%” substitute “ 2% ”.

(4) In section 142(2) (car first registered before 1 January 1998: the appropriate percentage), in the table—

(a) for “23%” substitute “ 24% ”, and

(b) for “34%” substitute “ 35% ”.

(5) Omit subsection 170(3).

(6) The amendments made by this section have effect for the tax year 2020-21 and subsequent tax years.

Pensions advice

3

(1) In Chapter 9 of Part 4 of ITEPA 2003, after section 308B insert—

(308C) (1) No liability to income tax arises in respect of— (a) the provision of relevant pensions advice to an employee or former or prospective employee, or (b) the payment or reimbursement of costs incurred, by or in respect of an employee or former or prospective employee, in obtaining relevant pensions advice, if Condition A or B is met. (2) But subsection (1) does not apply in relation to a person in a tax year so far as the value of the exemption in the person's case in that year exceeds £500. (3) The “value of the exemption”, in relation to a person and a tax year, is the amount exempted by subsection (1) from income tax in the person's case in that year, disregarding subsection (2) for this purpose. (4) If in a tax year there is in relation to an individual more than one person who is an employer or former employer, subsections (1) to (3) apply in relation to the individual as employee or former or prospective employee of any one of those persons separately from their application in relation to the individual as employee or former or prospective employee of any other of those persons. (5) “Relevant pensions advice”, in relation to a person, means information, or advice, in connection with— (a) the person's pension arrangements, or (b) the use of the person's pension funds. (6) Condition A is that the relevant pensions advice, or payment or reimbursement, is provided under a scheme that is open— (a) to the employer's employees generally, or (b) generally to the employer's employees at a particular location. (7) Condition B is that the relevant pensions advice, or payment or reimbursement, is provided under a scheme that is open generally to the employer's employees, or generally to those of the employer's employees at a particular location, who— (a) have reached the minimum qualifying age, or (b) meet the ill-health condition. (8) The “minimum qualifying age”, in relation to an employee, means the employee's relevant pension age less 5 years. (9) “Relevant pension age”, in relation to an employee, means— (a) where paragraph 22 or 23 of Schedule 36 to FA 2004 applies in relation to the employee and a registered pension scheme of which the employee is a member, the employee's protected pension age (see paragraph 22(8) and 23(8) of Schedule 36 to FA 2004), or (b) in any other case, the employee's normal minimum pension age, as defined by section 279(1) of FA 2004. (10) The “ill-health condition” is met by an employee if the employer is satisfied, on the basis of evidence provided by a registered medical practitioner, that the employee is (and will continue to be) incapable of carrying on his or her occupation because of physical or mental impairment.

(2) In section 228 of ITEPA 2003 (effect of exemptions on liability under provisions outside Part 2 of ITEPA 2003), in subsection (2), after paragraph (da) insert—

(db) section 308C (provision of pensions advice),

(3) Regulation 5 of the Income Tax (Exemption of Minor Benefits) Regulations 2002 (S.I. 2002/205) (exemption in respect of the provision of pensions advice) is revoked.

(4) In regulation 2 of the Income Tax (Exemption of Minor Benefits) (Amendment) Regulations 2004 (S.I. 2004/3087) omit the inserted regulation 5.

(5) The amendments made by this section have effect for the tax year 2017-18 and subsequent tax years.

Legal expenses etc

4

(1) ITEPA 2003 is amended as follows.

(2) In section 346 (deduction for employee liabilities)—

(a) in the heading, at the end insert “ and expenses ”,

(b) after paragraph B (in subsection (1)) insert—

(BA) Payment of any costs or expenses not falling within paragraph B which are incurred in connection with the employee giving evidence about matters related to the employment in, or for the purposes of— (a) a proceeding or other process (whether or not involving the employee), or (b) an investigation (whether or not likely to lead to any proceeding or other process involving the employee). (BB) Payment of any costs or expenses not falling within paragraph B or BA which are incurred in connection with a proceeding or other process, or an investigation, in which— (a) acts of the employee related to the employment, or (b) any other matters related to the employment, are being or are likely to be considered.

(d) in subsection (2) for “or B” substitute “ B, BA or BB ”,

(e) in subsection (2A), for “paragraph A, B or C” substitute “ any of paragraphs A to C ”, and

(f) after subsection (3) insert—

(4) In this section and section 349— (a) “acts” includes failures to act and acts are “related to the employment” if the employee was acting— (i) in the employee's capacity as holder of the employment, or (ii) in any other capacity in which the employee was acting in the performance of the duties of the employment, (b) “giving evidence” includes making a formal or informal statement or answering questions, (c) “proceeding or other process” includes any civil, criminal or arbitration proceedings, any disciplinary or regulatory proceedings of any kind and any process operated for resolving disputes or adjudicating on complaints, and (d) references to a proceeding or other process or an investigation include a reference to a proceeding or other process or an investigation that is likely to take place.

(3) In section 349 (section 346: meaning of “qualifying insurance contract”), in subsection (2)—

(a) after paragraph (c) insert—

(ca) the payment of costs or expenses incurred in connection with an employee giving evidence about matters related to the employee's employment in, or for the purposes of— (i) a proceeding or other process (whether or not involving the employee), or (ii) an investigation (whether or not likely to lead to any proceeding or other process involving the employee), (cb) the payment of any costs or expenses incurred in connection with a proceeding or other process, or an investigation, in which— (i) acts of an employee related to the employment, or (ii) any other matters related to the employment of an employee, are being or are likely to be considered,

, and

(b) in subsection (2)(d), after “(c)” insert “ , (ca) or (cb) ”.

(4) In section 409 (payments and benefits on termination of employment etc: exception for payments and benefits in respect of employee liabilities and indemnity insurance)—

(a) in the heading, for “employee liabilities” substitute “ certain legal expenses etc ”, and

(b) in subsection (3), at the end insert “ or by the employer or former employer on behalf of the individual ”.

(5) In section 410 (payments and benefits on termination of employment etc: exception for certain payments and benefits received by personal representatives of deceased individual)—

(a) in the heading for “employee liabilities” substitute “ certain legal expenses etc ”, and

(b) in subsection (3), at the end insert “ or by the former employer on behalf of the individual's personal representatives ”.

(6) In section 558 (deductions for liabilities of former employees: meaning of “deductible payment”)—

(a) after paragraph B (in subsection (1)) insert—

(BA) Payment of any costs or expenses not falling within paragraph B which are incurred in connection with the former employee giving evidence about matters related to the former employment in, or for the purposes of— (a) a proceeding or other process (whether or not involving the former employee), or (b) an investigation (whether or not likely to lead to any proceeding or other process involving the former employee). (BB) Payment of any costs or expenses not falling within paragraph B or BA which are incurred in connection with a proceeding or other process, or an investigation, in which— (a) acts of the former employee related to the former employment, or (b) any other matters related to the former employment, are being or are likely to be considered.

, and

(b) in paragraph C(b) (in subsection (1)), after “B” insert “ , BA or BB ”,

(d) after subsection (3) insert—

(4) In this section and section 560— (a) “acts” includes failures to act and acts are “related to the former employment” if the former employee was acting— (i) in the employee's capacity as holder of the former employment, or (ii) in any other capacity in which the former employee was acting in the performance of the duties of that employment, (b) “giving evidence” includes making a formal or informal statement or answering questions, (c) “proceeding or other process” includes any civil, criminal or arbitration proceedings, any disciplinary or regulatory proceedings of any kind and any process operated for resolving disputes or adjudicating on complaints, and (d) references to a proceeding or other process or an investigation include a reference to a proceeding or other process or an investigation that is likely to take place.

(7) In section 560 (section 558: meaning of “qualifying insurance contract”), in subsection (2)—

(a) after paragraph (c) insert—

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